How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or put them to work addressing problematic loans, likely making the bank better prepared to withstand financial trouble. However, banks that are losing money are less able to do those things.
Village Bank and Trust scored 16 out of a possible 30 on Bankrate's test of earnings, below the national average of 16.52.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important way to measure a bank's earnings. Village Bank and Trust's most recent annualized quarterly return on equity was 7.94 percent, below the national average of 9.28 percent.
The bank reported net income of $6.4 million on total equity of $165.4 million for the twelve months ended June 30, 2017. The bank had an annualized return on average assets, or ROA, of 0.92 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.